The law of unjustified threats is one of those peculiar quirks of English law that often surprise overseas lawyers and clients. Simply put, if you threaten an alleged infringer of your intellectual property with court proceedings then, in certain circumstances, the infringer can actually sue you.
The idea behind this is to protect people from economic loss caused by such a threat. For example, the loss they suffer if they withdraw goods from sale out of fear, following an unjustified threat to sue them.
As the story below (from the Law Society Gazette) explains, a Bill to reform the threats laws looks close to passing into law. Lawyers like me have been waiting for this reform with interest because the new law will remove the personal liability for lawyers. At the moment you can sue the lawyer as well as their client for making an unjustified threat.
But, aside from a few tweaks such as this, the threats provisions will remain substantively the same.
Threats provisions do not apply to every kind of intellectual property claim. There are no unjustified threats provisions for copyright or passing off (when someone trades off your goodwill without authorisation) and there are ways to avoid making an actionable threat if the letter is carefully phrased to only focus on types of infringement which do not give rise to liability. The threats offence is designed to protect only those lower down the distribution chain (eg retailers, not manufacturers), so a threat to sue for importing or manufacturing infringing goods will not normally be actionable.
Nevertheless, there is often a fine line to be walked and the possibility that you could be sued for making threats should be high in your mind before sending a "cease and desist" letter whenever patents, trade marks or designs are involved.